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Concession Behavior in a Bargaining Game

Author

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  • Barry Sopher

    (Rutgers University)

Abstract

This article reports on an experiment concerned with a two-stage, two-person, simultaneous-demand bargaining game. The focus of analysis is on a prediction for concession behavior in the second-stage game provided by Harsanyi's “risk dominance†principle, which is at odds with the prediction provided by the mixed-strategy equilibrium in the second-stage game. The results of the experiment provide support for the risk dominance prediction, with concessions occurring according to the prediction in 78% of eligible cases, thus outperforming the mixed-strategy equilibrium as a predictor of concession behavior.

Suggested Citation

  • Barry Sopher, 1994. "Concession Behavior in a Bargaining Game," Journal of Conflict Resolution, Peace Science Society (International), vol. 38(1), pages 117-137, March.
    • Handle: RePEc:sae:jocore:v:38:y:1994:i:1:p:117-137
    DOI: 10.1177/0022002794038001006
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    References listed on IDEAS

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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, December.
    3. Ken Binmore & Avner Shared & John Sutton, 1989. "An Outside Option Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(4), pages 753-770.
    4. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    5. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March.
    6. Sopher, Barry, 1990. "Bargaining and the Joint-Cost Theory of Strikes: An Experimental Study," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 48-74, January.
    7. Gilboa, Itzhak & Schmeidler, David, 1988. "Information dependent games : Can common sense be common knowledge?," Economics Letters, Elsevier, vol. 27(3), pages 215-221.
    8. Roth, Alvin E & Schoumaker, Francoise, 1983. "Expectations and Reputations in Bargaining: An Experimental Study," American Economic Review, American Economic Association, vol. 73(3), pages 362-372, June.
    9. Sopher, Barry, 1993. "A laboratory analysis of bargaining power in a random ultimatum game," Journal of Economic Behavior & Organization, Elsevier, vol. 21(1), pages 69-90, May.
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    Cited by:

    1. Michael Filzmoser & Rudolf Vetschera, 2008. "A Classification of Bargaining Steps and their Impact on Negotiation Outcomes," Group Decision and Negotiation, Springer, vol. 17(5), pages 421-443, September.
    2. David Sally, 2002. "`What an Ugly Baby!'," Rationality and Society, , vol. 14(1), pages 78-108, February.

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